logo T a x - L o k
A Complete Solution of All Your Tax Problems
Developed by Prakhar Softech Services Ltd.
(In Association with Shanti Prime Publication Pvt. Ltd.)
Call Us 09001929869
Call Us Shopping Bag (0)
  • follow us on facebook
  • follow us on twitter
  • follow us on google plus
  • follow us on linkedin
  • follow us on pinterest
  • rss fee
  • Visitors 
  • 0
  • 8
  • 1
  • 7
  • 7
  • 9
  • 7
News :
News
Sub
Loding Content
Submit a Query
  Refresh
   Verification Code
View Orders
show products
FB Followers
What is New
Finance Bill 2018-19
Budget Speech 2018-19
Query Answer
go to back

How to adjust or set off losses occurred from share market transaction? And what is the applicability of tax audit in such case?

Reply

Adjustment of loss

Loss from F&O business is considered as non speculative loss. As per the Section 71 of the Income Tax Act, loss in respect of such business can be set off against any other heads of income including income from speculative business but excluding income under the head “salaries” of that year.

Loss from Intraday transaction is considered as speculative loss. As per the Section 73 of the Income Tax Act, loss in respect of speculative business cannot be set off against any other heads of income i.e. it can be set off only against other speculative incomes if any in that year.

Loss from short term capital gain—Loss from short term capital gain cannot be set-off against any income except short term capital gain or long term capital gain.

Tax audit is required in two situations:

a.) If ‘turnover’ exceeds Rs. 2 crores in a financial year in case of F&O and equity, or

b.) If turnover doesn’t exceed Rs. 2 crore, but assessee incurred loss in share trading business or profit is less than 8% of the turnover and your ‘total income’ is greater than the basic exemption limit (i.e in situations where you are also having salary income along with your trading loss/ income).

If assessee falls in any of the above condition, Tax audit will become compulsory. Further filing an income tax return without a tax audit results in a defective return and assessee may get a notice to file a revised return with a tax audit report.

go to back